AMD, which makes processors for PCs and servers, is getting ready to lay off anywhere from 20 to 30 percent of its employees in the next few weeks. The company is expected to announce the number of lay offs in the next week -- around the time it will be reporting its quarterly financial results.

This marks AMD's second big staff cut in a year's time. About a year ago, it cut 10 percent of its employees. At the end of Q2 2012, the company said it had 11,737 employees.

Why is AMD making such drastic reductions in staff? Mainly because it is struggling to compete with other chip makers like Intel. Intel has not only grabbed the PC and server markets, but has also dipped into the mobile market as well, offering tablet and smartphone chips. AMD, on the other hand, hasn't made a push for mobile yet. This is clearly problematic, considering the PC market has been in decline in favor of mobile devices, and chip makers like Intel and AMD have to adapt to stay alive.

In addition to competition, SemiAccurate reported that AMD's board is a huge reason as to why the company was forced to make staff cuts. The report said that AMD's board is "incompetent" and that the company "staffed senior management with toadies who would do their bidding rather than do the right thing." SemiAccurate noted that AMD is mainly cutting engineers, and that AMD likely will not survive with this cut.

AMD has already announced ahead of its quarterly earnings report that that revenue would decrease 10 percent instead of the previously forecasted four percent decrease to two percent increase.

However, AMD is hoping for a brighter future with its first mobile chip release for Windows 8 tablets this year.

I really don't think AMD can come out of this downward spiral. It would be of no surprise to me if they stopped making CPUs entirely. However, they still make great GPUs. I have a radeon 7970 and its hella fast

Sadly that's probably the only thing keeping AMD afloat. Was always the case in the early days of the ATi acquisition when they were transitioning to s939 from s754. Just seemed like they didn't introduce their A64 X2 chips fast enough to compete with the looming Intel threat and all has gone downhill from there.

Shame really...I remember the AMD glory days of the T-bird and bridge penciling...then to the AthlonXP and wiping Intel with the floor with them. Ahhh memories.

Unfortunately, when AMD was producing its best chips, Intel was participating in some of the most anti-competitive behavior probably ever witnessed in the IT industry and essentially black-balled them in many scenarios. Intel simply used their vast cash stockpiles to push the market to use them... By the time anyone realized what was going on, it was too late. AMD got their one-time payout, but their brand did not gain what it should have and was doomed to be under-valued (in comparison to Intel, anyone), from then on out.

Bah! Even when that ended, AMD's sales sucked. That was just so much BS. Businesses did what their customers wanted, and if Intel would pay them to do that, even better. What some forget is that during the height of Intel's last two years of Netburst, when they were having problems, AMD was happily taking marketshare from them in several important categories, despite the supposed Intel payments.

Once Intel went back to their "M" chips, and came out with Yonah, and that was after Intel was forced to stop those payments, AMD's sales began to lag again.

You might have forgotten that AMD overpaid ~ $2 billion for ATi. And had to write that amount down a couple of years later. Not only that, AMD went heavily into debt to buy ATi. I made money on that deal. Had some Ati stock. Made 20% instantly when the deal was announced and sold all the stock. Then after the deal, I shorted AMD stock and made a bunch more money... :-) :-) That truly-stupid $2 billion over-payment would have financed AMDs continuing success after their blockbuster wake-up of Intel with their X2/Opteron processors. As it was, since the ATi acquisition, CPU development has been continuously financially shorted to help cover the expenses of that massive loan required to buy ATi.

Possibly. ATI was a real financial burden for AMD for several years. May be, just may be they would have stayed competitive with intel if not for the ATI acquisition. But as other people have said before, right now the only thing making AMD a little competitive and worth the money are their integrated GPU, which wouldn't have happened if not for ATI.